I’ve just finished reading The Man Who Knew: The Life and Times of Alan Greenspan, by Sebastian Mallaby. It is, without doubt, the most personally and professionally relevant biography I’ve read in many years. You may remember that Dr. Greenspan was Chairman of the Federal Reserve Board and the Federal Open Market Committee from 1987 … Read more Principles and Observations

Originally published in Flourishing September 2007. It has been six years since Islamic terrorist hijackers flew two commercial jetliners into the World Trade Center towers in New York City, and another into The Pentagon. They were thwarted by heroic passengers in their attempt to fly a fourth jetliner into the U.S. Capital Dome. We must … Read more Ad Astra Per Aspera

Originally Published in Flourishing July/August 2010 “To take from one, because it is thought his own industry and that of his fathers has acquired too much, in order to spare to others, who, or whose fathers, have not exercised equal industry and skill, is to violate arbitrarily the first principle of association, the guarantee to … Read more Jefferson’s First Principle of Association

Originally Published in eFlourishing Issue 10, May 30, 2010 There is nothing new under the sun, but the history you don’t know; or in my case, the genealogy. One of the oldest Indian reservations in North America is reserve land granted to the Schaghticoke Indians (descendants of the Mohicans) in the year 1736 by the General … Read more The Last of the Mohicans, Almost

Month: September 2013

Originally published in FlourishingJuly/August 2013.

I wrote about this two years ago, when the Arab Spring was first making the nightly news reports. At that time most commentators in the media presented the protestors as student idealists or as pawns of the Muslim Brotherhood, or both. I’m back to say I told you so; the media were wrong back then (with one notable exception), and they’re still wrong today. The real Arab Spring was/is about economic freedom and opportunity.

I remember back in 2011, seeing Geraldo Rivera interview a group of Libyan millennials, during the battle to overthrow the certifiable Muammar al-Gaddafi. To his great credit, Geraldo clearly understood those young people as seekers after freedom, economic opportunity, and the rule of law. Clutching their smart phones as their most potent weapon against tyranny, they were obviously frightened, but hopeful. They were trusting Geraldo to tell their story honestly and without the filter of partisan talking points. It may have been his finest hour as a journalist. But, if anyone in Washington heard him, we’ve seen no evidence of it. To the contrary, in fact.

Hernando de Soto is a Peruvian economist and author of The Mystery of Capital1. He recently published an article on the real Arab Spring—the one Geraldo reported on—in the July 13 issue of The Spectator.2In it he wrote that the Arab Spring was an economic uprising, not just a fight for a “democracy” wherein the people get to elect their next dictator. They were seeking the very things they had shared with Geraldo Rivera, economic opportunity, property rights, and the rule of law:

“The Arab Spring was a massive economic protest: a demand that the poor should have the basic rights to buy, sell and make their way in the world. I have the nerve to say this because just after the death of Mohammed Bouazizi, the Tunisian fruit seller who started the Arab Spring by setting himself ablaze, my researchers spent 20 months in the region to find out more …

…They were all, like Bouazizi, extralegal entrepreneurs—protesting for the right to get on. The right to own and better their lives; to accumulate capital; not to have their property expropriated on a whim. They were in businesses as diverse as restaurants, computing, real estate, opticians and taxis and their decision to commit suicide in public was usually taken after the authorities confiscated their wares or their documentation.

…Outside Cairo, the poorest of the poor live in a district of old tombs called the ‘city of the dead’. But almost all of Cairo is the city of the dead — that is to say, dead capital. Assets that cannot be used to their fullest, cannot be used as collateral for loans or changed for other assets. Seeds that can never grow. These people are working, but not in ways that western governments are prepared to recognise. Given the chance, they would pull themselves, and their countries, out of poverty. But they are denied the chance, because the rule of law is a cosy club to which only the elite belong.

If the West places Egypt and the Arab Spring into the category of ‘Islamist uprising’, it will not only misunderstand the hopes of millions but miss a remarkable opportunity. By our estimates, entrepreneurs who want a legal system with property rights like those in the West outnumber al-Qa’eda members in the region by a ratio of about 100,000 to one. [emphasis added]

…Britain is ideally placed to see the link between the 1688 Glorious Revolution, and what it did to ensure so many shared the benefits of the industrial revolution, and what is happening today in Egypt. If it did so,

much of the confusion of what underpins the Arab Spring would clear up. This is not only an Arab phenomenon. It needs an eloquent western advocate, who can point to the economic potential in extending the rule of law, property and businesses to the many, not the few. [emphasis added]

Unfortunately, they don’t have one in either London or Washington. But, they do have Hernando de Soto and his research team, perhaps Geraldo Rivera, too; and therein lies the seed of a promise of a better future for young Arabs and many others still struggling for freedom and opportunity throughout the Middle East. mh

*******

The Mystery of Capital: Why Capitalism Triumphs in the West and Fails Everywhere Else, Hernando de Soto,

Originally published in Flourishing July/August 2013.

Howard Homan Buffett was born in Omaha, Nebraska on August 13, 1903. Like his famous son, Warren, Howard maintained a conservative lifestyle throughout his life, a lifelong resident of Omaha.

But, while Warren Buffett, America’s greatest and most famous investor, is aligned with the American left on most political issues, and a strong supporter of President Obama; Howard might well have supported someone like the libertarian, former Texas Congressman, Ron Paul. Both Ron Paul and Howard Buffett had friendly, ongoing relationships with Murray Rothbard (1926—1995), a seminal figure in the early development of the libertarian movement. Howard served four full terms as a Republican Congressman in the 1940’s and early 1950’s.

It’s interesting to me that Rothbard and Warren Buffett were about the same age, and both attended Columbia University. While at Columbia, Buffett studied under the dean of value investing, Benjamin Graham; Rothbard was influenced by the greatest of the Austrian economists, Ludwig von Mises, attending Mises’ private seminars, while pursuing his PhD. in Economics. Both Warren and his father earned their baccalaureate degrees at the University of Nebraska.

Howard Buffett was never well known outside the confines of his own Congressional district, but he did gain notoriety for his opposition to the Korean War. He tried, but failed, to have classified documents released, which he said would prove that the United States was the instigator of that conflict. He was also opposed to the Marshall Plan and the Truman Doctrine. Very Ron Paul-like, don’t you think?

(Please see the comment on Howard’s character in the left hand column. They may have had differing political views, but in almost every way that really matters, Warren Buffett is his father’s son.)

You may remember that back in the days of “peak oil” hysteria, I told you that the “peak oil” theory was hogwash. That was a safe proclamation on my part, because the oil industry had hardly scratched the surface of our planet, which as you know, has a diameter of about 8,000 miles. That’s still true today.

But now—with the exception of a few demagogic politicians—we all know that “peak oil” theory is indeed hogwash, because the evidence has been found under the very land we live on. The new technologies of horizontal drilling and hydraulic fracturing are releasing natural gas, natural gas liquids, and oil from shale formations all across America, most notably for this discussion, in North Dakota, Oklahoma, Texas, Louisiana, Pennsylvania, and yes, Kansas.

Some years ago, I read a book, The Deep Hot Biosphere1, written by the world-famous geophysicist Thomas Gold. I won’t pretend that I understood every word, but I was fascinated by Gold’s idea that hydrocarbons are produced abiotically (chemically, as opposed to biologically) in the earth’s mantle, and that they have a natural tendency to migrate toward the surface, the Earth’s pressures being what they are. Gold has been mocked and denounced as a crank by many, and most of the oil we know about probably does have biological origins. But, I’ve held my own judgment in abeyance, pending further scientific investigation. The thing that hooked me on Gold’s theory was the knowledge that planets within our own solar system are swamped– if that’s the right word—with abiotic hydrocarbons. Methane being the most prominent.

Then, in June of this year, the U.S. Energy Information Administration (EIA) released a new study, Technically Recoverable Shale Oil and Shale Gas Resources: An Assessment of 137 Shale Formations in 41 Countries Outside the United States. This study doesn’t prove—nor does it disprove—Gold’s theory of abiotic oil.

But, it does admit that the EIA’s Annual Energy Outlook 2011 was off in its estimate of shale oil deposits by a factor of ten (32 billion barrels in the 2011 report vs. 345 billion barrels in 2013). I’ll go out on a limb here, and suggest that two years from now, the number will have jumped again.

Do you remember Matt Ridley? He is the author of The Rational Optimist2, a book I’ve recommended on several occasions. He’s also a geneticist and a member of the House of Lords. More to the point, he maintains a terrific blog, which you may want to bookmark, http://www.rationaloptimist.com/blog, and from which I now quote:

But there’s increasing doubt about whether all natural gas (which is 90% methane) comes from fermented fossil microbes. Some of it may be made by chemical processes deep within the earth.

The ocean floor accumulates not just the soft bodies of plankton, but also their shells and skeletons, made in effect from dissolved carbon dioxide, which build up to thick layers of rocks (such as the white cliffs of Dover in England).

When the ocean floor is driven down deep into the molten mantle, in the so-called subduction zones where continents are barging their way over the oceanic crust, this carbonate gets heated and pressurized. In 2004, Henry Scott and his colleagues at the University of Indiana discovered that ideal conditions exist for this carbonate to lose its oxygen and gain hydrogen instead, making methane on a massive scale.

In effect, this would recycle the Earth’s carbon dioxide by turning it back into the fuel from which it was made when burned or breathed. Maybe this explains why so much methane bubbles up through hydrothermal vents on the ocean floor.

….Dr. Kutcherov3 thinks the evidence “confirms the presence of enormous, inexhaustible resources of hydrocarbons in our planet.” If he is right—and America’s new Deep Carbon Observatory aims to resolve the question in the next few years—natural gas may effectively never run out. (emphasis added)

Within this blog post Matt Ridley cites a March 2013 article4 published in the Journal of Petroleum Technology to the effect that Dr. Thomas Gold, who passed away in 2004, may have been right after all; at least about abiotic methane. mh

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